10 Ways to Improve ASC Finances & Operations in 2013

Stuart Katz, director of TMC Orthopaedic Outpatient Surgery, Chris Bockelman, administrator of Foundation Surgery Center of Oklahoma, Greg DeConcilis, administrator of Boston Outpatient Surgical Suites, and Joe Zasa, co-founder of ASD Management, discuss 10 ways to achieve success at your surgery center in 2013.

1. Create a generic preference card. Mr. Katz says his surgery center updated physician preference cards in 2012, creating a "generic preference card" that gets pulled for every case. For example, when physicians perform knee arthroscopies, every physician receives the same items, in addition to any "extras" requested by each individual physician. For knee arthroscopies, Mr. Katz says out of approximately 25 supplies needed for the case, 20 are standardized and five are physician-by-physician. One of the differences is always glove size, because physicians have different sized hands and must be supplied accordingly.

Mr. Katz says the initiative has been extremely successful in improving efficiency and cutting costs. "We started with 2,000 preference cards," he says. "We looked at the supplies used for each case, and all the things that were the same across the board automatically made the generic preference card." He says the physicians signed off on the initiative because they understood it would improve efficiency; staff are able to equip rooms much more quickly, and they don't open supplies that the physician won't use.

2. Prepare for ICD-10. ICD-10 will kick off on Oct. 1, 2014, according to a recent change by the Department of Health and Human Services. Starting on that data, anyone filing a claim with an insurer or government health program must use a new diagnostic coding system that increase the number of codes from 14,000 (under ICD-9-CM) to 68,000 (under ICD-10-CM). Under ICD-10, HHS believes providers will be able to document procedures with greater specificity, improving insights into the landscape of healthcare and making diagnoses clearer for payors. At the same time, the implementation of ICD-10 will likely not be easy.

Mr. Zasa says surgery centers should be preparing for the transition to ICD-10 now, even though it's not due for another two years. A transition to ICD-10 will require training for physicians, coders and business office personnel, probable upgrades to surgery center software and discussions with payors about any changes that will occur under the new system.

"You have to be budgeting for your people to attend seminars and classes," Mr. Zasa says. He also recommends setting aside money in case of payment delays, while payors adjust to the new system. "I think payors are going to struggle due to the voluminous nature of the change for them," he says. "It may be a real challenge."

3. Eliminate supplies you no longer use. Mr. Katz says his surgery center has also cut costs by eliminating supplies that are no longer used in the facility. "We've eliminated some stuff that we haven't used in two or three years," he says. He says the surgery center has traded in older trays that were used once or twice a year and received appropriate trays in exchange.

"We got the values back in trays we use constantly, so we have them available all the time, instead of waiting for a tray to get re-sterilized," he says. He recommends looking at your trays and determining whether you could eliminate some of them: If you have discontinued a procedure or only perform it once a year, you could probably dedicate those funds to another product.

4. Complete quality reporting requirements. Mandatory quality reporting for ambulatory surgery centers began on Oct. 1, requiring all Medicare-certified ASCs to start reporting quality data G-codes or face future Medicare payment reductions. As of Oct. 1, ASCs must report data on the following five quality measures: patient burn, patient fall, wrong side/site/patient/procedure/implant, hospital admission/transfer and prophylactic IV antibiotic timing.

Starting in 2013, surgery centers will be required to report an additional two measures: safe surgery checklist use in 2012 and 2012 volume of certain procedures. This means surgery centers must start collecting quality data immediately if they are not already. Because 2013 requires surgery centers to report data based on activities conducted in 2012, surgery centers should make sure they are using safe surgery checklists and have some kind of system to capture surgical volume data.

ASCs that do not successfully report data to the Medicare program by the specified 2012 deadlines will see their payments reduced by 2 percent in 2014. Mr. Zasa says this potential payment reduction — and the importance of proving quality care in the outpatient setting — means a focus quality reporting is absolutely necessary for ASCs in the coming year. "We [at ASD Management] have been preparing for this for two and a half years, so it's going smoothly for us," he says. "But we're hearing that not all ASCs are seeing it go so well."

5. Educate per-diems on cost-cutting initiatives. Mr. DeConcilis says surgery center leaders often fail to educate per-diem staff about the ways they can contribute to the center. "You really have to have a monthly staff meeting where you're constantly talking about supply costs and physician recruitment," he says. "Make sure you invite all the per-diems, and pay them to come to the meeting." If the per-diems can't come to the meeting, print off detailed minutes and ask each staff member to sign off on them.

He says his surgery center actually audio-tapes the meeting and asks staff to sign off. "That can save you time, because the staff can listen to the tape on a slower day at the center," he says. While he says the surgery center tries to staff mostly full-time workers, per-diems are sometimes necessary, and it's important to keep them educated so that you don't drop efficiency and cost-cutting initiatives when they're working.

6. Invest in a third-party inventory management system. Mr. Zasa says surgery centers can cut costs significantly by focusing their attention on medical supplies, drugs and implants. He recommends investing in a third-party inventory management system that will help the ASC cut down on inventory on-hand and make sure the ASC is achieving the best pricing possible.

The system should also ensure that the surgery center is paying the prices listed in its vendor contracts. "These systems will pay for themselves, just by not keeping excess inventory on hand," he says. He adds that surgery center personnel should be trained in how to use the system to make sure the investment does not go to waste.

7. Improve pre-op education. Mr. DeConcilis says his surgery center has undertaken a project in the last year to improve patient pre-op education. He says it can be difficult for PACU staff to address patient questions and education about post-operative care after surgery, since they're often stressed and busy. He says instead, the surgery center started talking about those issues prior to surgery. The patient comes to the surgery center prior to surgery and answers a series of questions regarding their medical history, signs documents and undergoes a DVT risk assessment. The patient also has a phone conversation with a pre-operative nurse who goes over what to expect during the surgery. When the patient registers, they are also given an iPad, which they can learn to use about the upcoming surgery and what to expect afterwards.

"It keeps things moving in the post-op area because the staff doesn't have to spend as much time educating the patients," he says. He says patients are also more able to digest information when they're coherent and not recovering from anesthesia.

8. Make sure your supply storage is easily accessible. Mr. Bockelman says his surgery center completed a quality improvement study in 2012, focused on the facility's materials management process. "We created a living, working document on the total revamping of central supply and materials management, and we decided to create a lean environment for our inventory," he says. He says the surgery center had a large room for storing medical supplies, but the room wasn't organized efficiently and it was hard to set par levels. "We ultimately transitioned the room into a sterile environment, instead of using the long hallway down the backside of the OR," he says. Now, he says, the staff can view all the supplies when they walk into the room and easily ascertain order points and complete accurate counts.

He says the surgery center has also concentrated on managing the most-used items — the 20 percent of supplies that are used 80 percent of the time. He says the ASC has been vigilant about implant logs as well. "Make sure you capture every one of your implants and compare it to what you bill the insurance company," he says. If you track your implants properly, one that isn't covered by reimbursement will "stick out like a sore thumb," he says.

9. Assess equipment needs and future capital expenditures. As 2013 nears, surgery centers should be looking at their equipment needs for the next year, Mr. Zasa says. These considerations are essential to accurately budget for the next 12 months. For example, if your multi-specialty surgery center plans to add ophthalmology over the next year, do you have the money to invest in new equipment for your center? The femtosecond laser, used to automate the principle steps of cataract surgery traditionally performed by hand, costs around $400,000.

Some specialties, such as spine, have equipment that requires a good amount of space in a surgery center, meaning you may need to make modifications to your physical plant prior to implementation.

Even if you're not considering the addition of a new specialty, you should assess the state of your current equipment to determine what you may need to replace in the next year. "Stuff wears out, and it's not atypical for a center to have to purchase a $100,000-$125,000 piece of equipment every year," Mr. Zasa says. "You're going to have capital expenditures coming down the pike, and you need to be prepared for that."

10. Recruit new physicians. Physician recruitment is an ongoing challenge for most surgery centers, especially as hospitals continue the march towards physician employment and markets become more saturated with centers. Mr. Bockelman says his market is particularly challenging because, though it isn't large, it hosts three major health systems and numerous surgery centers. He says he has utilized the reputation of his current physicians in order to attract new providers to the surgery center. "You have to continue to have meetings focusing on quality patient care and take advantage of those opportunities," he says.

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